Weekly Thoughts From Jason S. Weissman

The disappointing job report (please see WSJ article from today)  was quite surprising...we thought that job losses would be flat, not negative for December.

http://online.wsj.com/article/SB126298709380022037.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

With the gains in asset values over the last year (equities/commodities--see the Economist Leader Story this week!), and general consumer confidence improvement, you would think that unemployment would have leveled off. Our firm is representing certain firms that are still in downsizing mode---cutting space and jobs, but we feel a sense of optimism from many organizations that we are working with. The leaders of  these companies "seem" quite bullish and optimistic on growth. The published indicators have a "lag" affect on actual reality. Where I have always been a believer in the Theory of Rational Expectations, if industry leaders and decision makers are positive on growth prospects, employment and capital spending will improve.

BUT as long as unemployment numbers grow, the commercial real estate market will be challenged. As the "debt maturity" default risk isn’t bad enough, commercial real estate owners still have to contend with deteriorating rental cash flow fundamentals. See the NY Times article below. Its a good read.

http://www.nytimes.com/2010/01/08/nyregion/08commercial.html

Watch our blog later in the week for a review of 2009 Boston Residential Real Estate Stats...

I am the Founder and Principal of Boston Realty Advisors. Please check in weekly to review my blog entries. I value client/reader feedback! Also, please email in questions and discussion topics.